the vat treatment of this category falls amongst the categories left at the Discretion of the MEMBER STATES, THE AUTHORITY treats healthcare services as VAT Zero-rated provided certain conditions are met.
Art, 41 of the Regulations defines VAT zero Rated healthcare services as services used for the Medical Treatment of the recipient of the services. This includes a hospital providing treatment to a sick patient. However, where the patient and the recipient of the supply are not the same person the services do not qualify for VAT zero-Rated.
THE AUTHORITY has issued a Public Clarification on “Business to business supplies of healthcare services” (VATPOl6) which explains that for instance a doctor who has contracted with a hospital to see patients who visit the hospital is providing services to the hospital, not direct to the patient, the doctor’s services, which are business to business Services, are subject to VAT at 5%.
To qualify for VAT Zero Rating, the services must be made by a healthcare body or institution, doctor, nurse, technician, dentist, or pharmacy, licensed by the Ministry of Health or by any other competent authority, and must relate to the well-being of a human being.
Healthcare services do not include elective treatment for cosmetic reasons other than prescribed by a doctor or medical professional for treating or preventing of a
medical condition.
THE AUTHORITY has issued a Cabinet Decision on “Medications and Medical Equipment Subject to Tax at Zero Rate” (No. 56 of 2017) in which zero-rated medications and medical equipment are defined.
Further, THE AUTHORITY has issued Cabinet Decision No, 9/12 O of 2020 (later amended by Cabinet Decision No. 15/3 O of 2021) which specifies that certain personal protective equipment (PPE) such as face masks, gloves, chemical disinfectants and antiseptics etc.., used for the protection from Covid-19 shall be temporarily subject to VAT at the zero-rate from 1 September 2020 till 31 December 2021.
A Public Clarification on *Temporary Zero-rating of Certain Medical Equipment” (VATP023) has also been issued by THE AUTHORITY to explain the zero-rating of this equipment in detail.
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